A business purchases depreciable machinery for $250,000 and sells it 5 years later for $200,000. At the time of the sale, accumulated depreciation totals $120,000. The company's tax rate is 35%. What is the total after-tax cash flow that will result from selling this asset?

A business purchases depreciable machinery for $250,000 and sells it 5 years later for $200,000. At the time of the sale, accumulated depreciation totals $120,000. The company's tax rate is 35%. What is the total after-tax cash flow that will result from selling this asset?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 11P: The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are...

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Question

What is the total after tax cash flow that will result from selling this asset on these financial accounting question?

A business purchases depreciable machinery for
$250,000 and sells it 5 years later for $200,000. At the
time of the sale, accumulated depreciation totals
$120,000. The company's tax rate is 35%. What is the
total after-tax cash flow that will result from selling
this asset?

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
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A company purchases depreciable equipment for $215 and sells it a few years later for $180. At the time of the sale, accumulated depreciation totals $120. If the company's tax rate is 36%, what is the total after-tax cash flow that will result from selling this asset? Answer
A company purchases depreciable equipment for $250 and sells it five years later for $180. At the time of the sale, accumulated depreciation totals $120. If the company's tax rate is 35%, what is the total after-tax cash flow that will result from selling this asset?
This is general accounting problem please help me solve
I don't need ai answer general accounting question
Pebble Co. recently sold a used machine for P40,000. The machine had a book value of P60,000 at the time of the sale. What is the after-tax cash flow from the sale, assuming the company's marginal tax rate is 20 percent?
What is the cash flow from disposing of the old machine?
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Harper Corporation recently sold a used machine for $50,000. The machine had a book value of $75,000 at the time of the sale. What is the after-tax cash flow from the sale, assuming the company's marginal tax rate is 25 percent? Select one: a. $50,000 b. $43,750 c. $56,250 d. $75,000